Bankruptcy Law

Under Article L. 654-2, 4° of the Commercial Code, a manager who has kept fictitious accounts may be declared bankrupt. This is the case when the manager could not have been unaware that the accounting entries were fictitious or non-existent, since he had directly intervened in the keeping of the company's books by giving orders to perpetuate the merger of assets and liabilities between different  …

Fictitious bookkeeping or no bookkeeping at all

Under Article L. 654-2, 4° of the Commercial Code, a manager who has kept fictitious accounts may be declared bankrupt. This is the case when the manager could not have been unaware that the accounting entries were fictitious or non-existent, since he had directly intervened in the keeping of the company's books by giving orders to perpetuate the merger of assets and liabilities between different structures .

Article L. 654-2, 4° also punishes the disappearance of accounting documents of the company or legal entity. The offense is constituted, in particular, in the person of the manager who avoids his obligation to make accounting documents available to the liquidator, or of the designated archiving company, who invites to take possession of them in attics which are difficult to access, and are thus guilty of bankruptcy through the disappearance of accounting documents .

Lastly, the law punishes the failure to keep accounts when required by applicable laws. A manager who is unable to produce a balance sheet, a trial balance or records , who fails to keep a chronological record of movements affecting the company's assets and liabilities, and to draw up a periodic inventory of these assets and liabilities , or who fails to keep accounts at all during a financial year, notwithstanding remedy by an accounting firm , is liable to prosecution. Characterization of the intentional element of the offence of bankruptcy due to a lack of accounting requires only proof of the perpetrator's awareness of the need to avoid his legal accounting obligations, but not proof that the accused intended to avoid or delay the declaration of cessation of payments, or to affect the consistency of available assets in such a way as to make it impossible for him to meet his liabilities . The total absence of accounting records in itself demonstrates the manifest nature of the irregularity and the awareness that the company's de facto manager necessarily had of it .

Cass. crim., 30 November 1987, LawLex202100002772JBJ (LJ). See also Cass. crim., 5 November 1998, LawLex202200008476JBJ (LJ).

Cass. crim., 25 February 2004, LawLex202100002040JBJ (LJ).

Cass. crim., 3 February 2016, LawLex202100001888JBJ (LJ).

Cass. crim., 6 December 1993, LawLex202100001998JBJ (RJ).

Cass. crim., 20 April 2017, LawLex202100001891JBJ (LJ).

Cass. crim., 25 November 2020, LawLex202100005849JBJ (RJ).

Cass. crim., 19 December 2012, LawLex202100001987JBJ (LJ).

Bankruptcy Law

1032. Fictitious bookkeeping or no bookkeeping at all

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1032. Fictitious bookkeeping or no bookkeeping at all

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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